Gates Foundation cuts Microsoft stake by 65% in estimated $8.7B sale
Gates Foundation Slashes Microsoft Stake by 65%: A $8.8 Billion Sell-Off Fuels Philanthropy Push. Gates Foundation cuts Microsoft stake by 65% in estimated $8.7B sale.
Gates Foundation cuts Microsoft stake by 65% in estimated $8.7B sale
The Bill & Melinda Gates Foundation Trust has made headlines with a blockbuster divestment, offloading 17 million shares of Microsoft (MSFT) in the third quarter of 2025.
This move, valued at approximately $8.8 billion based on the quarter's average trading price of $510.13 per share, reduced the Trust's stake in the tech giant by a staggering 64.91%—from about 26.2 million shares at the end of Q2 to roughly 9.2 million today.
It's a seismic shift for one of the world's most closely watched investment portfolios, dropping Microsoft's weight from over 27% to just 13% of the $49 billion endowment.
While the sale has sparked speculation in financial circles—Microsoft shares dipped 1.2% in after-hours trading on the news—the move aligns with the Foundation's aggressive philanthropy strategy.
Bill Gates, the Microsoft co-founder whose wealth stems from the company, is accelerating his pledge to donate 99% of his $106–$108 billion fortune by 2045, ramping up annual giving to $9 billion by 2026.
This isn't panic selling; it's calculated profit-taking after Microsoft's stock more than doubled since the Trust built its position in Q3 2021, fueled by explosive growth in AI and cloud services.
As global challenges like poverty, health crises, and climate change demand more resources, the Gates Foundation is liquidating high-concentration assets to fund its mission.
But what does this mean for investors eyeing Microsoft's trajectory? Let's break it down.
The Deal: Breaking Down the Numbers
The Q3 2025 13F filing with the U.S. Securities and Exchange Commission reveals a portfolio overhaul that's as bold as it is strategic.
Here's a snapshot of the key transactions:
| Asset | Shares Sold | Value (Est.) | Portfolio Impact | New Stake Weight |
|---|---|---|---|---|
| Microsoft (MSFT) | 17 million | $8.8 billion | ‑17.7% | 13% (from 27%) |
| Crown Castle (CCI) | 1.42 million | ~$130 million | Full exit | 0% |
| UPS (UPS) | 755,089 | ~$100 million | Full exit | 0% |
| Berkshire Hathaway (BRK.B) | 2.36 million | ~$1.1 billion | ‑9.78% | ~20% |
Values based on Q3 average prices; total portfolio value: ~$49 billion.
Microsoft's sale alone represents one of the largest single-stock divestments of the quarter, dwarfing even Warren Buffett's Berkshire Hathaway moves.
The Trust, which manages the Foundation's endowment, now holds a more diversified mix, with top holdings shifting toward stalwarts like Berkshire Hathaway (still ~20% of the portfolio) and Waste Management (WM), which has seen steady organic growth of 5–6% annually.
Why Now? Profit-Taking Amid Microsoft's AI Boom
Gates' history with Microsoft is legendary—he co-founded it in 1975 and stepped down as CEO in 2000—but the Trust's stake has long been a cash cow for philanthropy.
The position originated from massive donations, including 39 million shares transferred in 2022, leaving the Trust with a hefty 26.2 million shares worth $13.9 billion by Q2 2025.
The timing of this 65% cut couldn't be more opportunistic. Microsoft shares have surged 21.7% year-to-date in 2025, pushing the company's market cap past $4 trillion and making it the world's second-most valuable firm behind Nvidia.
- Key drivers: Cloud Dominance: Azure and other cloud services grew 40% in Q3 2025, outpacing estimates of 38.4%, thanks to enterprise demand for scalable infrastructure. Overall server and cloud revenue jumped 27%, with Azure up 39% in the prior quarter.
- AI Momentum: Microsoft's $80 billion fiscal 2025 capex on AI infrastructure—bolstered by its OpenAI partnership—has supercharged growth.
Tools like 365 Copilot and Azure AI services contributed 16 points to Azure's Q3 expansion.
Wall Street forecasts 14% revenue growth for Q4, with earnings up 11% in fiscal 2025. Since Q3 2021, when the Trust began accumulating, MSFT has delivered over 100% returns, turning the initial $7 billion investment into a windfall.
Selling now locks in gains while reducing exposure to a stock trading at 31x forward earnings—a premium justified by AI but vulnerable to capex pressures.
Philanthropy Imperative: Fueling the $200 Billion Giveaway
At its core, this isn't about doubting Microsoft—Gates remains a vocal advocate for its innovations.
It's about accelerating the Giving Pledge he co-founded in 2010 with Warren Buffett and Melinda French Gates. Gates has already funneled $100 billion through the Foundation since 2000, targeting global health, education, and poverty alleviation.
Now, he's fast-tracking the rest: Virtually all of his $108 billion net worth will flow to the Foundation by 2045, doubling its giving to another $200 billion (adjusted for inflation and markets).
Annual distributions will hit $9–$10 billion starting 2026, up from $6 billion today, with the Foundation set to dissolve on December 31, 2045—20 years ahead of prior plans. This requires liquidity.
The $49 billion portfolio must generate consistent cash without over-relying on one asset. Exiting Crown Castle (a telecom REIT) and UPS (logistics) frees up ~$230 million, while trimming Berkshire—Gates' longtime friend Buffett's empire—nets $1.1 billion.
Meanwhile, the Trust has boosted stakes in resilient names like FedEx (up 65% in prior quarters) for diversification.
Gates echoed Andrew Carnegie's "Gospel of Wealth" in his May 2025 blog post: The ultra-rich are "stewards" of fortune, duty-bound to return it to society.
Amid U.S. foreign aid cuts, he's urged governments and billionaires to step up, even clashing with Elon Musk over philanthropy gaps.
Market Ripples: What It Means for Investors
The sell-off jolted markets, with Microsoft's Q3 filing-season dip underscoring billionaire moves' influence. Yet, analysts remain bullish: All 34 covering MSFT rate it "Strong Buy," citing Azure's 37% Q4 growth forecast and AI's transformative edge.
The stock's 30% YTD gain trails only Nvidia among "Magnificent 7," but at $500+, it's pricey—P/E of 35x trails growth if AI capex pays off. For the Foundation, Microsoft stays a top holding (9.2 million shares worth ~$4.7 billion), signaling enduring faith.
Gates' pattern—selling high, holding core—has netted 92% gains on the stake overall.
Investors might take note: Diversify amid booms, but bet on innovators like MSFT for the long haul.
The Bigger Picture: Wealth, Power, and Purpose
This $8.8 billion pivot isn't just financial—it's philosophical. As Gates races to eradicate diseases and lift billions from poverty, he's modeling radical generosity in an era of trillion-dollar valuations.
With the Foundation's closure looming in 2045, expect more sales: Perhaps from Canadian National Railway or Deere & Co., rounding out its 24-stock portfolio. Critics question if philanthropy can replace government action, but Gates' track record—$100 billion already deployed—speaks volumes.
As he told Reuters in May, "Governments will come back to caring... but until then, we can't wait."
In a world where AI redefines economies, Gates is redefining legacy: From software pioneer to global change-maker, one share at a time.